p>Below is an illustration trading futures options on 10 Year notes (ZN). Our post shows bullish and bearish positions using a combination of call and put options.
Trade Options on Futures
10 year Notes (ZN) * Directional & Neutral Positions
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Term Structure
Volatility
Options fall into the category of being slightly undervalued in volatile markets in the weekly options report.
Notes:
Price Quotes: Points ($1,000) and 1/32 of a point. For example, 134-16 represents 134 16/32. Par is on the basis of 100 points.
Trading Hours: SUN - FRI: 5:00 p.m. - 4:00 p.m.
* Tip: Understanding what the numbers mean when looking at 30 year bond prices. The quotation you see is in U.S. dollars and cents on the index. Points ($1,000) and 1/32 of a point. For example, 134-16 represents 134 16/32. Par is on the basis of 100 points. Options - 1/64 of a point ($15.625/contract), rounded up to the nearest cent/contract. Learn more on our tutorial.
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here to read a helpful tip about Bond futures and options
10 Year Notes
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Strategies
Below is the starting position for a strangle swaps. It's a variation to a standard iron condor structure which benefits from an increase in implied volatility and time decay. It allows for time to adjust the spread structure if necessary as price moves within a reasonable range.
Below is a put credit spread transitioned to a vertical swap with rate assumptions above.
